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As much as it pains me to say it I can’t pull any of the Apprentices apart today for their lack of business acumen and generally being morons (as I so love to do) because this week’s tasks was incredibly difficult and the fact that either of the teams made any profit at all is amazing really.
The difficulty lay in the fact that they were thrown into an industry where they had no experience and all the transferable business skills that they do have, while relevant, were simply no substitute for actual knowledge of this sector. Their task involved waste removal – finding waste that needed taking, assessing whether to charge for the service and if so, how much, identifying the waste that had value and could be sold, assessing how much it would cost to tip the non re-saleable waste, finding buyers for the waste that had a retail value and on top of that, the logistics of collecting and distributing that waste. Rather them than me!
The candidates had little idea of the value of different materials other than a checklist and they were tasked with estimating the weight of items and identifying what they were. Being a TV show and not real life we all know of course that things are not fair and this was a perfect example. While Nick and Karen criticised Zoe and accusing her of ‘completely missing the point’ for attempting to charge to remove the waste from the two contracts lined up, the industry expert featured in the show and who appeared on The Apprentice: You’re Fired afterwards stated that in fact that was standard industry practice. It was only Team Logic’s high risk strategy of making no charge that resulted in Team Venture losing out. Had this risk not paid off (Venture won by just £6) I’m sure they would have being saying the exact same thing about them. I’m convinced that they film Nick and Karen both grimacing and nodding their heads over the shoulder of every business decision taken so that they can broadcast the appropriate one depending on the outcome!
So, what lessons can we learn (other than don’t attempt to take on industries we know nothing about!)? The key learning points here are the importance of understanding both cost and value and I was actually pleased that someone on The Apprentice (Melody) has finally recognised that time = money – halleluyah! Based on the usual profit and loss reporting in the boardroom you’d think that all people in business provide their services for free with profits simply calculated on a basic revenue minus cost basis with no inclusion of staff costs at all. Both teams also vastly underestimated the time it would take to logistically provide the service and how much this would necessarily limit their activities. Therefore:
● Understand all costs involved – including labour costs
● Know the value of things and estimate it accurately
● Be clear about logistics and plan your time, focusing on the most profitable activities
These things not only apply to businesses trading tangible products but to service based businesses such as myself. If you are effectively selling time you have to know the value of that time to your clients in terms of the benefits to them, have a clear understanding of how long things take to deliver (underestimating time needed will seriously reduce your hourly rate) and recognise that using your time incurs a cost to your business – improving efficiency being a perfect example of ‘waste removal’! (Too cheesy? Sorry!)